China

Apple in China

Unparalleled arrogance, full apology

Update (April 1st, 10pm GMT): Reacting to the repeated attacks, Tim Cook, Apple's boss, has apologised to the firm's Chinese customers. "We are aware that a lack of communications...led to the perception that Apple is arrogant and doesn't care or attach enough importance to consumer feedback," Mr. Cook wrote in the letter, which was published on the firm's Chinese website. "We express our sincere apologies for any concerns or misunderstandings this gave consumers." He vowed to improve Apple's customer-service policies.

APPLE and China seem a perfect fit. Both are secretive autocracies that have produced spectacular economic results and technological marvels—but only for those willing to abide by the strict rules imposed within their great firewalled gardens. Apple is one of China’s most successful brands and China one of Apple’s most important markets.

So it is quite surprising to see the American technology firm come under repeated attack in recent days by mouthpieces for the state and Communist party. On March 15th, World Consumer Rights Day, a much-watched annual programme on CCTV, the official broadcaster, attacked Apple’s policies and practices in China. The suggestion was that the greedy firm treated locals as second-class citizens. This week, the People’s Daily, a party mouthpiece, launched a series of vitriolic attacks that accused the firm of “unparalleled arrogance.”

It is not unusual for foreign companies to come under occasional attack in China. Sometimes, this is well deserved—as when, last year, KFC was exposed for supply-chain lapses that led chickens of dubious quality to be served in its restaurants. But the CCTV exposé, which discussed warranty-repair policies, did not find anything remotely as rotten at the core of Apple’s China business. So what is really behind all this?

One possibility is that the attacks are being orchestrated by a commercial rival that could gain from Apple’s misfortune. A number of celebrities rushed to join the CCTV attack on Apple by posting rude comments on Weibo, China’s version of Twitter. One of them, known to be a paid spokesman for a rival smartphone manufacturer, made the mistake of including in his Weibo posting the instruction to post the attack at a certain time—making clear that it was not written by him. Embarrassing, to be sure, but that does not prove a firm was behind this—especially since the other celebrity attackers are not thought to be on a rival’s payroll.

It seems more likely that Apple is the target of an officially-sanctioned attack, but which bit of officialdom might be pushing it remains unclear. Some think it might be a shakedown by CCTV, in order to encourage Apple to advertise on its channels. Others think that it is the vanity of bureaucrats at work. The ever-arrogant Apple may have failed to kowtow to the right officials in Beijing.

But what if Apple were merely a convenient whipping boy? Some think that this recent skirmish is in retaliation for foreign powers’ attacking Chinese firms abroad. The EU, for example, is currently taking a hostile stance towards China’s solar exporters. And American politicians have all but declared war on Huawei, a telecoms giant that stands accused—on no public evidence, it must be noted—of spying for the Chinese state.

It is just possible that the attacks on Apple are a prelude to pushing foreign firms out of the Chinese mobile-phone market. That seems ridiculous, given how popular Apple’s operating system and Google’s Android are in China. However, an official white paper did recently make the extraordinary claim that China’s reliance on Android was dangerous. The country’s censors or security enforcers may want to promote domestic operating systems that they can more easily penetrate, monitor or control.

There is another, even more troubling, theory that could explain the bizarre and unexpected attack on Apple this month. Taken together with other recent tirades against foreign firms like Volkswagen, this could mark a radically different approach to foreign companies being tested by China’s new leadership. Such sabre-rattling could be seen, on this view, as the natural complement to the belligerence seen over the Senkakus and in other military matters.

Truth be told, nobody outside the official inner circle has a clue what is really going on. The only certain thing is that the famously aloof technology firm is surely paying attention. “China is currently our second-largest market,” Tim Cook said to Xinhua, the official newswire of Chinese propagandists, before the attacks. He then perhaps tempted fate by going on: “I believe it will become our first. I believe strongly that it will.”

Among all the reasons given by the author the following reason seems to be the most likely 'Some think that this recent skirmish is in retaliation for foreign powers’ attacking Chinese firms abroad' . The west and US especially are attacking foreign firms like Japanese and Korean car companies, so as to increase the sales of their own local brands.

Nobody believes in communism now. The most wanted reforms are democracy and anti-corruption, but the Party is not dare or willing to do it. They find nationalism is very convenient. That is why there are military planes cruise around DiaoYu Islands (or Senkaku Islands). If they crash, there will be another round of government encouraged Anti-Japan or Anti-U.S. protests. The gangsters probably will burn Japanese brand cars or attack U.S embassy.

"Truth be told, nobody outside the official inner circle has a clue what is really going on."
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Maybe those inside haven't the foggiest either. Could be just commercially driven. Too much conspiracy theory and too little fact-finding, I reckon.

I would put that as 'always thought-provoking, and sometimes right.' The Economist likes to make bold predictions, and I have looked at back issues from time to time and they have not been right more often than you would expect. But the fact that they make bold predictions is in their favour, and that they cover issues that you often are not aware of does so too, so (nearly) always thought-provoking is more than good enough.

"And American politicians have all but declared war on Huawei, a telecoms giant that stands accused—on no public evidence, it must be noted—of spying for the Chinese state. [...] However, an official white paper did recently make the extraordinary claim that China’s reliance on Android was dangerous. The country’s censors or security enforcers may want to promote domestic operating systems that they can more easily penetrate, monitor or control."
Isn´t this accusation a little bit strange, when one considers that the US have a law, which forces companies to do the same?https://en.wikipedia.org/wiki/Communications_Assistance_for_Law_Enforcem...

I would find it more likely that it is an overlapping set of reasons that caused Apple to end up on several shortlists. One additional factor could be that Apple has stated that they will be bringing manufacturing jobs back to the US.

a whole article of conspiracy theory with very little facts & elaboration - next time please at least list the name of the newspaper rather than 'one newspaper','some reports'. Sounds like guesswork.
It failed to mention why Apple has been singled out (your job is at least to provide basic info for readers' own judgement):
1) Apple was accused of double standard on warranty,2 years in US and 1 year in China
2) Customer service in China markets have fallen below expectation
3) No response to any media questioning or reporting and staff behaving arrogantly to public scrutiny
I don;t agree with the accusation but at least mention the facts, come on Economist!

I also think that the article is a little long on conjecture and a little short on facts.

Furthermore, I have no doubt that Apple has had poor customer service in China, and offers shorter warranties there. As for the charge that they do not respond to public scrutiny, that is part of their founding charter, as far as I know. They do not respond to the media here in the U.S, either.

However, from an American perspective, those complaints are relatively minor. You hear companies accused of much worse on a pretty much daily basis here. So the suddenness and the scope of the current anti-Apple campaign seems all out of proportion to us. Plus the idea of anyone, even a rival corporation, paying an actor for a snarky Twitter comment at a particular time -- that is very, very weird to us. It makes people worry that something else if going on, even people who are generally very pro-China.

Once again China is showing itself for what it is. An autocratic nation with the outward appearance of a modern nation without freedom. However, the West continues to dream of a free market in China driven by capitalists. Capitalism is inherently incompatible with Communism. Without true democracy China will continue to expose this dark side now largely hidden from view due to their recent economic success. This is not in the least bit surprising as we have seen with the dispute over the Senkakus and the boycotting of Japanese firms recently orchestrated by the CP. The CP is doing what it has always done which is to try and influence the market. Whether it succeeds is a different question. Without real choice the Chinese are still under the direction and control of the state.

If you think every action and move of Chinese are dictated by the state in today's China, then you should go to Weibo and look at all the dissenting opinions being expressed on the microblogs there. The CCP tries very hard to clamp down on them, but the microbloggers always find ways around these barriers. The Chinese people are smarter than you give them credit for.

This dark side of the economy is not hidden from view. Any non MNC that has operated in China will tell you that "their own products" are the BEST. They protect them with tariffs and other regulations that foreigners cannot navigate. When it comes to global brand like APPLE it is not a surprise. State owned enterprises have vested interest in own and selected brands. So if their brands do not work they mount such tactics. A growing consumer society that offers enormous opportunities for foreign investments ? Cost and Risk in navigating the obstacles outweigh the profits.

Perhaps now not only Apple but many other American companies will consider moving out of authoritarian China altogether.
Let PRC, whose economy is shrinking create thousands of new jobs for increasingy frustrated/pauperized Chinese.

I don't think it's quite time for Apple to throw it's toys out of it's pram quite yet. The fact is Apple is still making a lot of money in China, and a clumsily handled smear campaign isn't going to materially change that.

The essay makes me believe that The Economist is a mouthpiece of some conspiracy theorists or politicians. The author defined the reasonable protest against unfair warranty policy as an attack against foreign firms. It`s amazing that the author could analyse the ‘attack’ so deeply without accordance.

When there's a well timed, co-ordinated series of posts and articles attacking a target, and one of those posts even reveals the fact that is was instructed to be released at a precise time, we're a bit beyond merely theorising about conspiracies. We're actually watching one in action.

Do we have any reason to doubt it's also happening in these comment sections of the TE? Every article about China is filled with people accusing The Economist of treason, conspiracy, etc, etc against China, and are disgusted by it, yet can't help but read every (and only!) China articles on a weekly basis and comment on them.

You're going to get slaughtered by the pro-China people. I honestly haven't read any of the comments, but I foresee a bunch of "how dare you attack China!?"

The bottom line is this. And this is it. Nothing more. The Chinese government has been taking a lot of heat about the environment for the last couple of months. This "pigs in the Huangpu river in Shanghai" is the latest. So, they are distracting their audience.

There is no more to this story than that. Between China's first lady strutting her stuff and the evil Apple, they're hoping that people will forget the fact that the air, water, and food in China are virtually useless. And you know what? It probably will work. They know that the people are going to get angry with their news for saying this crap, but they don't care. They'll stop thinking about all the BS they have to deal with on a daily basis.

Nothing against the Chinese people, but their education has been controlled by the government, so they're quite the simple people. They are easily distracted and fall for these kinds of tactics every time.

Look at a history (even the last year) of Chinese news headlines, and look at the issues in China, and you'll see a pattern. It's just a new way to control them.

If you do think "they're quite the simple people", I guess you are a "simple" people too. And I can tell you responsibly that there are much more people in China concern about "the pigs" than those who talk about "the evil Apple" so far as I know.
I want to remind you that you could also be "controlled" by the media, so please keep a open mind to China.
Thank you for telling me what you thought about China, because communication is the first step to resolve misunderstandings.

well well well...
The author merely told what happens, but came out with ridiculous reasons to explain.

1. The country’s censors or security enforcers to promote domestic operating systems?
90% (if not 100%) phones now in China is either Andriod system or Apple. China has no a "domenstic operating system" to rival.

2. Link up to Volkswagen / senkakus?
Well, Volkawagen - it is really doing bad in China. Many people in China feel they are scorned by Volkawagen. Take the DSG (DirectShiftGearbox）problem for example, Chinese consumers were complaining for more than 3 years, now not untill CCTV gave it a shock, Volkawagen did not give a feedback and make the recalling happens! We doubt its integrity.
Well, Senkakus - CCTV bashing Apple so that to make wars?

3. But you mentioned Huawei, this gave you some credit. China may think, you guys treat mine (Huawei) so bad, ain't it for me to remind you that I can do something similar to you as well.

Free markets? Yeah right. The EU and US are incredibly protectionist when it comes to certain areas. Massive agricultural subsidies and telecom oligarchies. China offers the same individual liberty as the West! Freedom of speech and what not is allowed here! The only difference is freedom after the speech! Why do you pick on something so minor?!

"The only difference is freedom after the speech!"
You mean, in China you are free to say anything, but if you say the wrong thing, you lose your freedom and go to jail? The concept of free speech is a little bit different in the West.
That China offers the same individual liberty as the West is the most ridiculous claim that I have heard in a long time. Try and establish a political party in Beijing and you will soon understand the difference.

Yep! 10 cents for each recommendation on the comment and 20 cents for each reply to it! We just bounce links around in the office and swarm on articles with comment sections on China because it's an easy money maker.